Vancouver Condo Info

I just returned from a trip to Portland Oregon and thought it would be interesting to compare this specific US market to Vancouver. Portland is the 3rd largest city in the pacific northwest, after Vancouver and Seattle. Like most place Portland has seen a large increase in house prices, but has seen the market cool or drop recently.

According to the most recent numbers I can find:

Vancouver median family income for 2004: $56,200. (source)
Portland median income for 2003: $67,900 usd. (source)

Vancouver average house price March 2006: $705,000. (source)
Portland average house price: $318,200 usd. (source)

Converting the Portland numbers to $CAD at today exchange rate gives you an average household income of $77,107 CAD to buy the average house costing $361,347.

Here’s a specific example on house prices in Portland: The house I was staying in was located in North Portland, 15-20 minutes out of the downtown core. In Vancouver terms I think it would be approximately like southeast vancouver. This is an older 2 story ‘fixer upper’ house on a double lot with full basement and some renovations on a quiet street near a major road. The house was recently assessed at $230,000.

The headlining story on MSNBC right now is home sales rise a bit but prices fall sharply.

Michelle Meyer, an economist at Lehman Bros., said the rise in sales was partly a response to falling prices and a recent dip in mortgage rates

“The pickup in home sales reflects stabilization in demand and the first signs that the housing market is beginning to balance,” she said in a note to clients.

Economist Joel Naroff of Naroff Economic Advisors said the report “does not point to a major housing meltdown,” but he noted that there is a “huge” supply of unsold homes and condominiums on the market.

The number of homes on the market is up 34 percent from a year ago and represents a supply of more than seven months at current sales rates, compared with an average of just four or five months in the boom years of 1999 through 2005.

“The housing market is far from the bottom,” Naroff said in a research note. “Sellers will have to overcome their state of denial and start dropping prices even more to clear this market. And once that happens, we will then have to convince buyers that prices have stopped falling. We are a long way from that point.”

There are concerns at the federal level that if the housing slump across the USA continues or gets worse that it could cause bigger problems for the US economy that has already started to slow down. Its suprising that this is a problem across most of the country. What ever happened to the maxim “all real estate is local”?

There’s an article in the National Post today looking at what you get for the ‘average’ house price in various Canadian cities, mostly in comparison to Toronto. The typical Toronto house costs $356,423 while the average house in Vancouver costs $821,722. The article essentially claims that you get a lot more in Vancouver compared to Toronto for the ‘average’ price so the price difference is not as huge as it appears.

OK, maybe Vancouver is pricer than Toronto — or is it? Most bedroom communities are not taken into account in the average Vancouver house price. And if you’re willing to sacrifice a little neighbourhood safety and convenience, it is possible to find a nice starter house in the Vancouver core.

They go on to compare what you can get in Maple Ridge vs. what you can get in Markham:

B.C. commuters can find a lot more for their money. “Maple Ridge is a great bedroom community just east of Vancouver,” says Mr. Antalek. “It’s ideal for families, with great schools, parks and recreation areas. It’s also very safe.” That $356,423 will buy you a three- or four-bedroom, two-bathroom house on 65×130 feet of land — 25×20 feet more than a lot in Markham. It will have ample parking and most houses require minimal renovations. And the drive to downtown Vancouver will take 45 to 90 minutes, or 50 minutes by train.

Meanwhile in Newfoundland for the $356,423 that it would take to buy the average house in Toronto (or a little bit less than half the average house in Vancouver) you can get a 5,050-sq.-ft. beautifully renovated home in St. John’s on seven acres of land, but I bet its a lot trickier to get a decent supply of heroin.

The globe and mail article I linked to a few days ago about the housing affordability study has been reported on locally in a Vancouver Province article by Ashley Ford. Comparing these two articles is interesting in where they differ:

1) The G&M article doesn’t draw any conclusions about future activity, but the Province article reports that: “That trend is expected to ease in some parts of the country next year as prices start to level off and even decline, but not in B.C. or Alberta.” Interesting to note that prices in some categories have already started to level off or even decline here in Vancouver, so I’m not sure where ‘not in B.C. or Alberta’ comes from.

2) Where the G&M articles says “Renters were much more likely to fall into this category of people who struggle to afford housing” the article in the Province says “However, high prices notwithstanding, it suggests it is still better to own a home than rent.” No. It doesn’t. It suggests that owners tend to have more money than renters (obviously), NOT that it is better to own than rent even with current high prices, which is a dangerous view to take concerning affordability.

3) It is unfortunate that in the local article there is absolutely no info about affordability levels in Vancouver compared to the rest of Canada, just the same National stats from the Globe story. It would have been informative to include this information and would have given the story a local angle.

*subtly edited to make it look like I didn’t make the obvious mistake that VHB pointed out.

I see that they’ve started taking down the tarps and scaffolding on the 3400 block of west broadway. The owners and neighbors must be breathing a sigh of relief, I believe the whole south side of the street has been covered for more than a year. How long does the average leaky condo rainscreen repair take in Vancouver? It seems like a lot of buildings are covered for a extensive amount of time.

Have we made it through the majority of leaky condo repairs in Vancouver yet? It seems like the vast landscape of tarps have started to recede somewhat from the fairview and cambie neighborhoods.

On a side note: if you have pictures of tarp covered condo repairs in the lower mainland I’d love to see them*. Email them to me with the address and any other info you may have and I’ll post them. Ideally I’ll build up a searchable database of condo repair photos that may or may not be useful when condo-shopping in Vancouver.

*clearly I am a freak.

There’s a story in the Globe and Mail today about a study on affordability across canada. Apparently its expensive to live in the most expensive cities and 14% of Canadians spent 30% or more of their income on shelter. The 30% of income thing is a standard indicator of lack of affordability.

The concept of affordability has traditionally been based on a ratio of housing costs to total household income, Statscan said. A household paying 30 per cent or more of its pre-tax income for housing is considered to have affordability problem.

During Statscan’s survey period, 12 per cent of households spent between 30 per cent and 50 per cent of pre-tax income on housing. Two per cent spent 50 per cent or more to keep a roof above their heads.

Averaged across Canada, it was renters that were more inclined to have this affordability problem, so I’m guessing most other Canadian cities don’t have the situation we have in Vancouver where owners buying at current prices are subsidizing renters.

Renters were much more likely to fall into this category of people who struggle to afford housing, Statscan said. Thirty-one per cent of people who rented in 2004 spent 30 per cent or more of their budget on shelter, compared with 6 per cent of home owners.

“These rental households consisted mostly of individuals living alone, those relying on government assistance, and those in low income,” Statscan said.

Not surprisingly, people who rented in Canada’s two most expensive cities, Toronto and Vancouver, incurred the highest cost in terms of rent.

The best line of the whole study is at the end:

Renters who earned less than $19,190 a year were 18 times more likely to be cost-burdened when it comes to housing than people in the top one-half of the income chain.

Yes, the startling fact: People with lower incomes have a more difficult time affording things. Thanks Statscan!

What’s that old saying again?

Bears miss out on opportunities to make buckets of cash with no effort, Bulls keep betting till they go broke, and Pigs wallow in their own filth until such time as they are ready to become delicious crispy strips of bacon.

Mmmm.. Bacon.

There’s an article in todays Globe and Mail about some of the anger and distress caused by the recent increases in False Creek lease rates.

The people who own homes in False Creek aren’t rich and they aren’t poor. They’re teachers, child-care workers, retired professionals and small-business owners. Over the past 30 years, most of the nearly 300 homeowners have paid out their leases, so this increase does not affect them.

But the owners of 118 units, like Ms. Greene, still pay monthly. Ms. Greene said she could never afford to buy out her lease, last tabulated at more than $30,000.

The new rates were passed unanimously by city council last month, though some politicians are now saying that they ‘didn’t fully understand the issue’.

Michael Flanigan, director of Vancouver’s real-estate services, said the increases were tabulated to reflect current market values. Mr. Flanigan stressed that the increases aren’t carved in stone; residents will have their say at a council meeting. He said consideration may be granted to those who can’t afford the fees.

“We are not insensitive,” Mr. Flanigan said in an interview. “Not all homeowners are in the same socio-economic class or have the capacity to pay these increases. . . . We don’t necessarily want to see economic evictions.”

No, we don’t necessarily want to see economic evictions, but you can’t make world class omelette’s without breaking a few eggs eh?

As I’m sure you’ve noticed the tap water in vancouver is running a murky yellowish brown right now, so there is a boil water advisory in effect. This means any water you consume should be fancy expensive bottled water, or cheap tap water that you have boiled to avoid risk of gastro-intestinal illness.

VHB has this topic covered with a request that comments stay on the topic of water and remain free of unsubstantiated rumours.

I’d like to stake my claim as the irresponsible vancouver real-estate blogger, so post info, conspiracy theories and unsubstantiated rumours below.

Just keep it cleaner than the water.

Story in the Sun

There’s an interesting article in Newsweek about US real estate woes. The National Association of Realtors just had their annual meeting and the mood and topics up for discussion were decidedly different from last year. One of the topics discussed is the difficulty in predicting how hard of a crash the US housing market will experience:

That uncertainty stems from the fact that the current housing slowdown isn’t like the more typical real estate busts of the early 1980s or early 1990s. Those downturns followed a traditional pattern: mortgage rates rose, job growth faded and the economy weakened, pinching people’s ability to buy homes. Today, in contrast, mortgages are still near 45-year lows and unemployment is down, yet many buyers are reluctant to make offers. Lereah attributes this to high prices reducing the number of people who can afford homes, falling demand by investors and the public’s psychological shift from celebrating the boom to worrying about a bubble. Those forces make this slowdown an anomaly, which makes it hard to predict where things will head next. Says Lereah: “You’d have to go back to the Great Depression to find a housing period that is this unique.”

The Great Depression? Geez, thats encouraging. So if it wasn’t rising mortgage rates or high levels of unemployment that caused the problem, who’s to blame for the real estate slump? The media of course!

..many crowded into the convention center to attend seminars on how to adapt to the slowdown. In nearly every session, speakers spent a few minutes blaming the media for hurting the market. All those headlines about a bursting real estate bubble have a lot of potential buyers really freaked out, industry officials say, which is one reason they’ve begun running full-page newspaper ads reminding would-be sellers that despite slowing sales, conditions aren’t really so bad.

So if you work in the media in Vancouver, please take heed: The future of our real-estate market is in your hands. If you run any stories reporting negative signs in our condo market you very well may destroy our economy.

But you don’t really care do you? And why don’t you care? ..because you’ll be making money selling ad space to realtors telling everyone everything is going to be ok.

You greedy bums.. How could you?!